GLOSSARY OF MORTGAGE TERMS

GLOSSARY OF MORTGAGE TERMS - H

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Hard-Money Mortgage
A cash loan.

Hazard Insurance
Covers property from natural disasters, including fire, wind, vandalism, and other hazards.

HECM (Home Equity Conversion Mortgage)
Usually called 'Reverse Annuity Mortgage,' wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.

Hectare
A metric unit of land measurement equaling 100 ares, or 10,000 square meters, or 2.47 acres. There are 100 hectares in a square kilometer

HELP (Homebuyer Education Learning Program)
An educational program from the FHA that counsels people about the home buying process; HELP covers topics like budgeting, finding a home, getting a loan, and home maintenance; in most cases, completion of the program may entitle the homebuyer to a reduced initial FHA mortgage insurance premium-from 2.25% to 1.75% of the home purchase price.

Hidden Defect
Any encumbrance on a title that is not apparent in the public records; for example, unknown heirs, secret marriages, forged instruments, mental incompetence, or infancy of a grantor.

Highest and Best Use
An appraisal and zoning concept that evaluates all the possible, permissible and profitable uses of a property to determine the use that will provide the owner with the highest net return on investment in the property, consistent with existing neighboring land uses.

Home Equity Conversion Mortgage (HECM)
Usually called 'Reverse Annuity Mortgage,' wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.

Home Equity Line of Credit (Home Equity Loan)
A mortgage, usually in second position, which allows the borrower to obtain cash against his or her home's equity.

Home Equity Loan (Home Equity Line of Credit)
A mortgage, usually in second position, which allows the borrower to obtain cash against his or her home's equity.

Home Inspection
An examination of the structure and mechanical systems to determine a home's safety; makes the potential homebuyer aware of any repairs that may be needed.

Home Warranty
Offers protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance ,overage extends over a specific time period and does not cover the home's structure.

Homebuyer Education Learning Program (HELP)
An educational program from the FHA that counsels people about the home buying process; HELP covers topics like budgeting, finding a home, getting a loan, and home maintenance; in most cases, completion of the program may entitle the homebuyer to a reduced initial FHA mortgage insurance premium-from 2.25% to 1.75% of the home purchase price.

Homeowner's Insurance
An insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that result in someone's injury or property damage.

Homeowner's Warranty
Insurance that covers items in the home, such as heating or air conditioning, throughout the coverage period. Can be paid for by either the buyer or the seller as a condition of sale.

Homeowners' Association Fees (Common Area Assessments)
Charges to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD); these fees typically maintain the property and its common areas.

Homeowners' Loan Corporation
A federally chartered corporation established in 1933 and administered by the Federal Home Loan Bank Board to refinance mortgages of economically distressed homeowners. The HOLC legally expired in 1954.

Homestead
the dwelling place, owned and occupied by a family, including the land, house and accessory buildings

Household
All persons occupying a separate housing unit that has either direct access to the outside or a public area, or separate cooking facilities. When the members are related by law or blood, the household constitutes a family.

Housing Counseling Agency
Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and home buying.

Housing Expenses-to-Income Ratio
The ratio (expressed as a percentage) of a borrower's housing expenses divided by his or her monthly income.

Housing Permit
A certificate issued by a local government authorizing residential construction, describing the type of structure to be built and its estimated cost.

Housing Start
The commencement of construction of a new housing unit. For multiple dwelling structures, each unit is counted as a start when excavation of the building site begins. For public housing, the awarding of the contract is counted as the start.

Housing Stock
The total number of residential units, including mobile homes, available for nontransient occupancy

HUD
U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.

HUD-1 Settlement Statement
Also known as the 'settlement sheet,' it itemizes all closing costs; must be given to the borrower at or before closing.

HVAC
Heating, Ventilation and Air Conditioning; a home's heating and cooling system.

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